Scotmid Co-op has announced a £5.6m trading profit in its results for year to 25 January 2020, compared to £5.3m the previous year.
The retail society said: “It is pleasing that in our 160th anniversary year we have produced these positive results given the very unfavourable market background especially for our retail businesses.”
The co-op also reported a strong balance sheet with assets of £105m, and trading turnover increased by £7m to £385m.
But the report also warned that the Covid-19 pandemic will bring continued uncertainty and additional costs to the business.
The result was driven by strong sales figures from the society’s convenience food business, despite “significant cost increases”, including employment costs, distribution charges and increased waste packaging levies. The report said strong like-for-like sales were underpinned by “range improvements and innovation”.
Chief executive John Brodie said: “This was achieved in a year dominated by Brexit uncertainty and without the benefit of the exceptional summer that boosted sales in 2018.
“The background market conditions for Semichem continued to be poor, particularly in Northern Ireland, but actions taken helped to deliver an underlying result ahead of last year. Tight management of the cost base and rebasing of the supply chain were essential in the delivery of our year-end result.”
Scotmid’s funeral business finished the year strongly helping to recover the shortfall experienced in the first half of the year, added Mr Brodie.
And the society’s property portfolio delivered good growth in rental income together with a positive asset valuation, reflecting the strength of the Edinburgh residential property market.
“Our co-operative and community development activity in the year was focused on celebrating 160 years as a successful and thriving co-operative business,” said Mr Brodie. “We invested record sums in our community grants and raised £325,000 for our charity of the year. We finished the celebration year with a world record breaking Burns Supper.”
In last year’s report, Mr Brodie warned the society faced a cumulative burden of costs and said highlighted “the need to focus on innovation, effective investment and tight control of costs to continue to make progress”.
This year, he said: “Once again the society has delivered despite the Brexit saga and another challenging year for retailers generally.
“Scotmid can therefore reflect on a positive 160th anniversary year but be mindful of the ever-growing cost challenge and the uncertainty around global events, particularly the Covid-19 pandemic. In the short term we must manage the significant issues arising from the virus outbreak, however, I am sure everyone in the society will rise to the challenge.
“Overall it is our continuous improvement philosophy and our core purpose (to serve our communities and improve people’s everyday lives) that will continue to be our guide for the future.”